How Failure Breeds Success

10 October 2016

Below are two great articles that relate to our panel discussion. The first teaches us about how to bounce back from failure and the second is about how big businesses too can experience failure. Hope you enjoy and learn from them. I wish you all a big public failure soon Yasmine Azor How Failure Breeds Success By Jena McGregor, with William C. Symonds in Boston, Dean Foust in Atlanta, and Diane Brady and Moira Herbst in New York Everyone fears failure. But breakthroughs depend on it. The best companies embrace their mistakes and learn from them Ever heard of Choglit?

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How about OK Soda or Surge? Long after “New Coke” became nearly synonymous with innovation failure, these products joined Coca-Cola Co. ‘s (KO ) graveyard of beverage busts. Choglit, in case you blinked and missed it, was a chocolate-flavored milk drink test-marketed with Nestle (NSRGY ) in 2002. OK Soda, unveiled in 1994, tried to capture Generation X with edgy marketing. The “OK Manifesto,” parts of which were printed on cans in an attempt at hipster irony, asked: “What’s the point of OK Soda? ” It turned out customers wondered the same thing. And while Surge did well initially, this e-too Mountain Dew later did anything but. Sales began drying up after five years. Given that history, failure hardly seems like a subject Chairman and CEO E. Neville Isdell would want to trot out in front of investors. But Isdell did just that, deliberately airing the topic at Coke’s annual meeting in April. “You will see some failures,” he told the crowd. “As we take more risks, this is something we must accept as part of the regeneration process. ” Warning Coke investors that the company might experience some flops is a little like warning Atlantans they might experience afternoon thunderstorms in July.

But Isdell thinks it’s vital. He wants Coke to take bigger risks, and to do that, he knows he needs to convince employees and shareholders that he will tolerate the failures that will inevitably result. That’s the only way to change Coke’s traditionally risk-averse culture. And given the importance of this goal, there’s no podium too big for sending the signal. “Using [the annual meeting] occasion elevates the statement to another order of importance,” Isdell said in an interview with BusinessWeek. CLOSE TO BLASPHEMY

While few CEOs are as candid about the potential for failure as Isdell, many are wrestling with the same problem, trying to get their organizations to cozy up to the risk-taking that innovation requires. A warning: It’s not going to be an easy shift. After years of cost-cutting initiatives and growing job insecurity, most employees don’t exactly feel like putting themselves on the line. Add to that the heightened expectations by management on individual performance, and it’s easy to see why so many opt to play it safe. Indeed, for a generation of managers weaned on the rigors of Six Sigma error-elimination programs, embracing failure — gasp! – is close to blasphemy. Stefan H. Thomke, a professor at Harvard Business School and author of Experimentation Matters, says that when he talks to business groups, “I try to be provocative and say: ‘Failure is not a bad thing. ‘ I always have lots of people staring at me, [thinking] ‘Have you lost your mind? ‘ That’s O. K. It gets their attention. [Failure] is so important to the experimental process. ” That it is. Crucial, in fact. After all, that’s why true, breakthrough innovation — an imperative in today’s globally competitive world, in which product cycles are shorter than ever — is so extraordinarily hard.

It requires well-honed organizations built for efficiency and speed to do what feels unnatural: Explore. Experiment. Foul up, sometimes. Then repeat. Granted, not all failures are praiseworthy. Some flops are just that: bad ideas. The eVilla, Sony Corp. ‘s (SNE ) $500 “Internet appliance. ” The Pontiac Aztek, General Motors Corp. ‘s (GM\ ) ugly duckling “crossover” SUV. For good measure, we’ll throw in our own industry’s spectacularly useless flop: the CueCat. A marketer’s dream, the device, which was launched in 2000 (when else? , scanned bar codes from magazine and newspaper ads, directing readers to Web sites so they wouldn’t have to go to the trouble to type in the URL. But intelligent failures — those that happen early and inexpensively and that contribute new insights about your customers — should be more than just tolerable. They should be encouraged. “Figuring out how to master this process of failing fast and failing cheap and fumbling toward success is probably the most important thing companies have to get good at,” says Scott Anthony, the managing director at consulting firm Innosight.

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